A sales target invented from ambition tells you nothing when you miss it. A target worked backwards from what the business actually needs to cover its costs and pay you is a number you can plan against, break into weekly activity, and act on early when it slips.
Build it from the bottom up.
Start from break-even, not from ambition
Total your fixed costs, add what you need to pay yourself, and divide by your gross margin. That is the revenue the business must produce before anything else, and it is the floor rather than the goal.
Then set the target above it deliberately, with a reason for the gap: a hire, equipment, a reserve. A target with no purpose behind it gets abandoned the first difficult month.
Convert it into weekly activity
Work back through your own conversion rates: how many enquiries become quotes, how many quotes become customers, and what an average customer is worth. That tells you how many conversations a week the target requires.
Activity is what you control. Outcomes follow it with a lag, which is why tracking only revenue means finding out too late.
Track leading indicators, not just sales
Enquiries received, quotes sent, follow-ups made and conversion rate all move before revenue does. A quiet month in three months’ time is visible in this week’s enquiry count.
Review weekly. Monthly review is too slow to correct anything within the month, and annual review is a post-mortem.
Make targets honest and use them properly
Targets nobody believes are ignored, and targets that are never missed were set too low to be useful. Adjust them when circumstances genuinely change rather than to avoid discomfort.
Where staff are on targets, incentives must be lawful and clearly agreed, with obligations set out by the Department of Employment and Labour. Free business planning support, including forecasting, is available through the Small Enterprise Development and Finance Agency.
Frequently asked questions
How should a sales target be set?
Backwards from fixed costs plus what you need to pay yourself, divided by gross margin. That is the floor, not the goal.
How do I turn a target into a plan?
Work back through your conversion rates to find how many enquiries and quotes a week the target requires.
What should I track weekly?
Enquiries, quotes sent, follow-ups and conversion rate. These move before revenue and give early warning.
How often should targets be reviewed?
Weekly. Monthly is too slow to correct anything within the month, and annual review is a post-mortem.
What makes a target useless?
One nobody believes, or one that is never missed. Both mean it is not informing any decision.
Originally published in April 2018. Updated September 2026 into practical guidance on setting and using sales targets.
